Standing Committee B

[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 296 - Release of detained cash

Amendment proposed [this day]: No. 458, in page 171, line 25 after 'seized', insert 
'or by a person claiming ownership of the cash and without objection from the person from whom the cash was seized'.—[Mr. Grieve.]
 Question again proposed, That the amendment be made.

John McWilliam: I wish hon. Members a happy new year, and remind the Committee that with amendment No. 458 we are taking the following: Government amendments Nos. 331 and 333.
 Amendment No.419, in page 172, line 17, leave out 'other than' and insert 'including'. 
 Amendment No. 461, in page 172, line 35, after 'cash', insert 
'or any person claiming that any cash detained under section 294 belongs to him'.
 Government amendment No. 336. 
 Government new clause 9—Victims.

Bob Ainsworth: It is good to see you, Mr. McWilliam. I see that you get all the best shifts—Thursday afternoons when there is a one-line Whip. I am sure that you are as pleased about that as we are.

John McWilliam: Order. One of the responsibilities of being the senior Chairman on a Standing Committee is to take the rotten shifts.

Ian Davidson: With the rotten Ministers.

John McWilliam: Order. Sedentary interventions are to be deplored at all times.

Bob Ainsworth: You can see, Mr. McWilliam, from the way that I have managed to garner support from my own Back Benches that we follow a long and weary route on this Bill.
 When we broke for lunch we were talking about amendments grouped with amendment No. 458. I indicated a preparedness to examine the situation with regard to amendment No. 458 about the position of a claimed owner's ability to apply for the release of cash or to become a party to the proceedings in the light of arguments put forward. I suggested that if I found a case for that, having listened to the arguments, I would table an amendment on Report. I said that I was not prepared to accept amendment No. 461. 
 On amendment No. 419, I said that it was our intention to allow a person from whom cash was 
 seized to be a party to the proceedings and to be guaranteed an opportunity to make representations at a forfeiture hearing. That would be achieved by rules of court that apply under section 53(2) of the Magistrates' Court Act 1980, which provides that the court—after hearing the evidence—and the party shall make the order for which the complaint is made or dismiss the complaint. The rules of court will provide that an application for forfeiture is to be regulated in the same manner as a complaint. The amendment is, therefore, unnecessary. 
 The person from whom the cash was seized will additionally have the right to apply for the release of detained cash at any time. If he can establish that it is neither recoverable property nor intended for use by any person in unlawful conduct, the court or sheriff may order the release of the cash. In the light of that assurance, I hope that the hon. Gentleman will withdraw the amendment. 
 As for the Government amendments, new clause 9 replaces in an extended form the protection afforded by subsections (4) and (5) of clause 297 for victims of unlawful conduct who claim entitlement to cash where forfeiture is being sought by a constable or customs officer. It applies to persons who claim that some or all of the cash seized under clause 293 rightfully belongs to them and they were deprived of it, albeit through unlawful conduct. Cash may be released to the victim even when criminal proceedings with which the cash is connected will be commenced and have not been concluded. It will be for the court to decide whether that would be appropriate. 
 New clause 9 follows the same policy as the provisions in paragraph 9 of schedule 1 of the Anti-terrorism, Crime and Security Act 2001, in relation to cash that is suspected of being linked to terrorism. It does not enable the release of cash that is retained under any other legislation, for instance under section 22 of the Police and Criminal Evidence Act 1984, or any other part of this Bill, for instance under a restraint order in part 2. 
 Amendments Nos. 331, 333 and 336 are consequential amendments.

Dominic Grieve: I am grateful to the Minister for his comments on my amendments. We were right to focus on amendment No. 458, and I am particularly pleased that it appears that the Minister has provided an assurance that he will consider the issue that that amendment raises. I am also grateful to the Minister for saying that the amendment was carefully worded. I gave it a lot of thought, because I was aware that there was a potential problem and I could see why the rights of potential owners were not explicitly stated in the clause.
 The amendment refers to a matter that should be examined. Given the Minister's assurance and his remarks on the other two amendments, on the questions and on the rules of court, I am content to beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Bob Ainsworth: I beg to move amendment No. 330, in page 171, line 25, leave out from second 'the' to end of line 27 and insert
'conditions in section 294 for the detention of the cash are no longer met in relation to the cash to be released'.
 Clause 296 deals with the release of detained cash. It sets out conditions under which the court may release cash, on application by the person from whom it was seized. The effect of the amendment is to apply the same test for the release hearing as is used in applications for continued detention under clause 294. 
 The tests that the court applies to detention and release applications should be the same, as the issue is the same: namely, should the cash continue to be detained? The only material difference between detention and release applications is that, under the latter, the burden of proof rests on the person from whom the cash was seized, rather than on the seizing officer. 
 The amendment makes it slightly easier for an applicant to secure the release of the cash. Instead of satisfying the court that the cash is not recoverable property, or that it was not intended for use in unlawful conduct, he need only satisfy it that the set of conditions in clause 294 for detention is no longer fully met. Those conditions are that there are reasonable grounds for suspecting that the cash is derived from, or intended for use in, unlawful conduct and that its detention is justified pending further investigation, or that it is connected with an offence for which criminal proceedings are being considered or are under way. 
 The amendment follows the approach taken at paragraph 5 of schedule 1 of the Anti-terrorism, Crime and Security Act 2001, with regard to persons challenging the detention of cash that is suspected of being linked to terrorism.

Nick Hawkins: I agree with the Government that the amendment is sensible, and my party is happy to go agree to it. I ought to add that the Government's decision to amend the earlier part of clause 296 in this amendment also helps the argument that I am about to advance for my party's amendment, which is listed next. However, I will not anticipate that debate.
 Amendment agreed to. 
 Amendment made: No. 331, in page 171, line 33, leave out from 'forfeiture' to 'until' and insert 
'under section 297, or for its release under section [Victims], is made'.—[Mr. Bob Ainsworth.]

Nick Hawkins: I beg to move amendment No. 418, in page 171, line 36, leave out paragraph (b).
 As I said, we argue that the amendment goes in the same direction as Government amendment No. 330. We felt that clause 296 as originally drafted went too wide. Working along the same lines as the Government have in amendment No. 330, we suggest that it would be helpful to delete paragraph (b) of subsection (5). 
 Subsection (5) states that cash is not to be released if in the United Kingdom or elsewhere 
''proceedings are started against any person for an offence''
 —which means any offence— 
''with which the cash is connected, until the proceedings are concluded.''
 That seems to us to be an extremely wide exclusion. We understand why subsection (5)(a) should be included. There is clearly a good reason for it. However, we are reinforced in our belief that paragraph (b) takes the matter too wide. Once again the Law Society of Scotland takes the same view as my hon. Friends and I and has suggested the amendment to delete paragraph (b). I shall listen with interest to the Minister's comments, but I feel bolstered not only by the Law Society of Scotland but by the fact that the Government, on further reflection, had already decided that the clause as originally drafted was too draconian, as the Minister said in moving the previous amendment.

Bob Ainsworth: The hon. Gentleman shall be deprived of the opportunity of listening with interest to my comments. We should thank the Law Society of Scotland for its amendment, and we should thank him for having moved it and for his assistance in improving the Bill. We accept the amendment and urge our hon. Friends to support it.

Nick Hawkins: I am delighted. We have already had the Grieve amendment; perhaps I can claim that this one should be called the Hawkins amendment.

Mark Field: Or possibly the MacHawkins amendment.
 Amendment agreed to. 
 Amendment made: No. 332, in page 171, line 39, leave out subsection (6).—[Mr. Bob Ainsworth.] 
 Clause 296, as amended, ordered to stand part of the Bill.

Clause 297 - Forfeiture

Amendment made: No. 333, page 172, line 16, leave out subsections (4) and (5).—[Mr. Bob Ainsworth.]

Bob Ainsworth: I beg to move amendment No. 334, in page 172, line 29, leave out subsection (6).
 This is a drafting amendment. On reflection, it is clear that subsection (6) is unnecessary. If the court considers that cash is not recoverable property, it cannot forfeit it under subsection (2) and must, therefore, release it. Amendment No. 334 deletes a redundant provision. 
 Amendment agreed to. 
 Question proposed, That the clause, as amended, stand part of the Bill.

Norman Baker: Subsection (1)(b) relates to forfeiture in Scotland. I understand that the procurator fiscal detains the cash under clause 294, and Scottish Ministers can then order forfeiture of the money. Why are the two handled separately? Why do Scottish Ministers not undertake both detention and forfeiture of cash?

Bob Ainsworth: There needs to be some co-ordination. It is no good the hon. Gentleman turning
 up late on a Thursday afternoon and trying to replace the hon. Member for Orkney and Shetland (Mr. Carmichael). I am being unfair.
 In the first instance, there is always the question of criminal pursuit, so that is obviously an issue. I do not wish to go over what we discussed this morning. The procurator fiscal is involved because criminal pursuit is possible. We need to amend the Bill, which was accepted when we considered the matter this morning. I intend to do that to provide that when the procurator fiscal has dropped out of proceedings because the chance of criminal pursuit has been considered and does not apply, Scottish Ministers should deal with a subsequent case because it would be a civil matter. We discussed that in greater detail this morning. I am sorry that the hon. Gentleman could not be present, but that is the reason why two sets of people are involved.

Norman Baker: I am grateful to the Minister and wish him a happy new year also. I discussed the matter with my hon. Friend the Member for Orkney and Shetland, who attended this morning's sitting. He was unhappy with the explanation that was given and asked me to pursue the point this afternoon. There is co-ordination among members of the Committee.
 I am sure that if I had raised a point that was out of order, you, Mr. McWilliam, would have told me so.

John McWilliam: Order. The point was not out of order. I am advised that the matter was discussed at length this morning, so should not be discussed again. I am sorry that the hon. Member for Lewes (Norman Baker) could not be present this morning, but that does not excuse him from raising a matter that was discussed at length.
 Question put and agreed to. 
 Clause 297, as amended, ordered to stand part of the Bill. 
 Clauses 298 and 299 ordered to stand part of the Bill.

Clause 300 - Compensation

Bob Ainsworth: I beg to move amendment No. 335, in page 173, line 20, leave out subsections (2) and (3) and insert—
'(1A) If, for any period after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant. 
 (1B) The amount of compensation to be paid under subsection (1A) is the amount the court or sheriff thinks would have been earned in interest in the period in question if the cash had been held in an interest-bearing account. 
 (1C) If the court or sheriff is satisfied that, taking account of any interest to be paid under section 295 or any amount to be paid under subsection (1A), the applicant has suffered loss as a result of the detention of the cash and that the circumstances are exceptional, the court or sheriff may order compensation (or additional compensation) to be paid to him. 
 (1D) The amount of compensation to be paid under subsection (1C) is the amount the court or sheriff thinks reasonable, having regard to the loss suffered and any other relevant circumstances'.

John McWilliam: With this it will be convenient to take amendment No. 420, in page 173, line 21, leave out 'exceptional' and insert
'such that the court or sheriff considers them reasonable'.

Bob Ainsworth: Amendment No. 335 will ensure that the court has discretion to pay compensation in lieu of interest when cash is not paid into an interest-bearing account under clause 295. In most cases cash will be paid into such an account, but there are circumstances in which it will not, for example, if the physical cash is required as evidence in criminal proceedings. In such circumstances, the safeguard of the interest-bearing account that provides financial recompense would be lost.
 Subsection (1B) of the amendment provides that the amount of compensation to be paid in such circumstances is the amount of interest that the court considers would have been earned if the cash were paid into an interest-bearing account. Subsections (1C) and (1D) make consequential amendments to clause 300 to take subsections (1A) and (1B) into account. Clause 300 already makes provision for compensation to be paid over and above interest payments in exceptional circumstances. Subsections (1C) and (1D) extend that to allow compensation to be paid over and above the money paid in lieu of interest under subsections (1A) and (1B) in exceptional circumstances. Additional compensation will be awarded in only exceptional circumstances because, in most cases, the accrued interest or sum equivalent to such interest should be sufficient compensation. 
 An example of a case in which additional compensation might be awarded under subsection (1C) would be one in which the claimant satisfied the court that the detention of the cash had prevented him from concluding a business deal and that the deal would have earned him a sum exceeding that earned through interest. If the court is satisfied by the facts, it might be reasonable to consider those to be exceptional circumstances, particularly if the person concerned was not wealthy. That is only an illustration. In every case, the court will decide based on the circumstances. The same approach to compensation was taken in paragraph 10 of schedule 1 to the Anti-terrorism, Crime and Security Act 2001, which received Royal Assent before Christmas. 
 Amendment No. 420 would lessen the test that the court must apply when an application for compensation is made. That test would then be whether the court or sheriff were satisfied that loss was suffered as a result of the detention and whether the court or sheriff considered the circumstances reasonable. For compensation for a sum greater than the amount of interest that would have accrued, the test is that loss has been suffered and that the circumstances are exceptional. 
 Government amendment No. 335 would amplify the original compensation provisions in clause 300. Under the revised clause, it is made clear that if the cash is not held in an interest-bearing bank account during its detention, the amount of compensation will be the interest that would have been paid had the money been held in such an account. The general 
 principle is that the payment of interest should be sufficient compensation.

Dominic Grieve: In most cases, the payment of the interest is likely to be sufficient, but in some circumstances, the person concerned may be able to show that the money would have been used in a particular way, and that a loss has therefore occurred. Does that fall into the ''exceptional'' category? It would be helpful if the Minister could tell us what the word ''exceptional'' means, because it is on that issue, and the anxiety that ''exceptional'' may be too high a test, that amendment No. 420 hangs.

Bob Ainsworth: I do not think that I can spell that out. People will have to make the case that exceptional circumstances apply. The hon. Gentleman is right to say that such a case may be made if the money would have been used to realise profits far greater than the interest that would accrue from a bank account. The court should consider those circumstances, and we have made provision for that. We are talking about cash and items that are transferable for cash. We believe that, in the overwhelming majority of cases, interest alone will be the appropriate compensation, but the court should be allowed to hear such a case.

Ian Davidson: Will the Minister clarify what would happen if someone swore blind that they were heading to the bookies to put £25,000 or £500,000 at odds of 20 to one on a horse that subsequently won? Are those exceptional circumstances? If someone alleges that they were about to make a transaction that would have resulted in substantial profit, would that be accepted? We must watch that we do not open the door to conspiracies against the public purse.

Bob Ainsworth: My hon. Friend makes a fair point. That would be a matter for the court to decide. If the court considered the case once the horse had already won, it would be difficult for the person to prove their intentions for the cash.
 In some circumstances, the person may be able to persuade the court—and witnesses may be able to assist him in this—that he was on his way to conduct a transaction that would have made a substantial profit. If he could prove that, it would be only right for the court to consider the loss imposed on him. Such a person would have had his cash detained, although he was going about his lawful business. I know that my hon. Friend thinks that people who wander around his constituency or elsewhere with large amounts of cash are strange, but strangeness is not grounds for bringing proceedings. Therefore, if the person can show the court that he had such an opportunity and that the unfair activities of the customs officer or the constable deprived him of profit, surely it is only right that the court should be allowed to consider the matter.

Ian Davidson: I assure the Minister that if a person in my constituency—and in other areas of Glasgow—were able to wander around with substantial amounts of money in their pocket, it would not be difficult for him to produce witnesses who would say that he was about to undertake a deal that was going to make him
 a huge amount of profit. Does not my hon. Friend recognise that there are substantial dangers in the Government's action? I accept that there are problems for a person who has had his money seized, but we must be careful not to leave the door open to abusive claims.

Bob Ainsworth: Obviously there are dangers, but there are also deterrents, such as perjury, that give people pause for thought before they lie in court about what was intended. The alternative is to say that under no circumstances should a person be compensated over and above the interest that is available from an interest-bearing bank account. Grave injustices could arise from such a decision. That is why we intend that, when exceptional circumstances have been satisfactorily proven, the court may consider compensation above that level.
 There is no need to discuss the matter further and I ask the hon. Member for Beaconsfield to think about the matter. He is, in effect, proposing to lower the threshold at which the court must consider exceptional circumstances. Most cases would involve cash, and the appropriate level of interest is the right amount of compensation. Only in exceptional circumstances should a greater amount be considered.

Nick Hawkins: The Minister thought that, because my hon. Friend the Member for Beaconsfield intervened, he would pursue amendment No. 420, but we agreed that I should move the amendment. The Law Society of Scotland suggested the provision and we strongly support it. It must not be forgotten that we are talking about innocent people. That issue underpins clause 300. From the way in which he responded to his hon. Friend the Member for Glasgow, Pollok (Mr. Davidson), I know that the Minister recognises that.

John McWilliam: Order. Amendment No. 420 cannot be subject to a separate Division, because if amendment No. 335 is accepted, the text that it amends would be withdrawn from the clause. Does the hon. Gentleman understand that?

Nick Hawkins: I understand that, but I believe that it is in order, Mr. McWilliam, to address the issue.

John McWilliam: Order. The hon. Gentleman is perfectly in order. I am merely pointing out to him the implication of him saying that he would ''move'' the amendment. I am just explaining the situation.

Nick Hawkins: I am grateful to you, Mr. McWilliam. The point that my hon. Friend's intervention raised remains relevant. Before we read the Government amendment, the Law Society of Scotland queried—and we agreed with this—the use of ''exceptional'' in the Bill, which is why we tabled amendment No. 420. We want to propose, as the Minister has correctly set out, a wider test. The Minister's revised wording of the clause still contains that exceptional circumstances test.

Paul Stinchcombe: On a point of clarification. I am considering the wording that the hon. Gentleman advocates and the reasons behind it. Would it be preferable to replace ''them'' with ''it''? Otherwise, the amendment would not make
 sense and would not catch the meaning that he is seeking to articulate. I will leave that with him. I make that suggestion simply so that I may understand the nature of his argument.

John McWilliam: If I can be of assistance, let me explain. Because of the way in which amendment No. 420 is framed, the relevant words will disappear if Government amendment No. 335 is included in the Bill. The words reappear in the subsequent amendment. A way around that would be to attempt to amend the subsequent amendment at a later stage in the Bill.
 In passing, I ask hon. Gentlemen who choose to grow a beard in the recess to let me know that they have done so, in order that I may recognise them. I also make that request of hon. Gentlemen who shave one off.

Nick Hawkins: In relation to the hon. Gentleman's intervention, we shall look again at the wording of our amendment to take account of the serious point that he makes. As you have reminded us, Mr. McWilliam, we may need to table further amendments to the Government's revision of the Bill at a later stage. Our basic point is that the provision should not apply only in exceptional circumstances. Starting from the premise that clause 300 deals with a situation in which someone's cash is taken, and no forfeiture order follows—because it turns out that they were not doing anything wrong, and they were not one of the Mr. Bigs that the hon. Member for Glasgow, Pollok wants to hit—it is not appropriate to have too high a threshold for the person to claim that he has suffered a loss. It should not only be in exceptional circumstances; the Law Society of Scotland is right to say that it should be what the court or sheriff considers reasonable. I am sure that it will be possible to return to the issue at a later stage or in another place and produce a further amendment to the revised Bill, which would introduce the concept of reasonableness and give the court or sheriff discretion.

Paul Stinchcombe: I now understand what the hon. Gentleman is suggesting. Will he confirm that he wants the Bill to allow compensation to be awarded if the court considers that it is reasonable to do so?

Nick Hawkins: Exactly. I am grateful to the hon. Gentleman.

Ian Davidson: I am grateful to have the opportunity to respond to the points made by the hon. Member for Surrey Heath (Mr. Hawkins) when he referred to my anxieties about a Mr. Big. He suggested that the circumstances provided for would not apply when it was a Mr. Big but would apply when it was an entirely innocent party. Unfortunately, he fails to recognise that a Mr. Big might be found innocent, or at least not found guilty, in certain circumstances. That does not necessarily mean that he is innocent. Therefore, rewarding him unduly by allowing him to produce witnesses who will assert that he was going to do this, that and the other, will not necessarily ease my anxieties.

Nick Hawkins: I hear what the hon. Gentleman says, but we must preserve the position whereby if somebody is innocent, and it seems that the forfeiture order should not properly have been made, the person should be compensated. That seems to be the purpose of the Government's rewriting of the clause. I see the Minister nodding assent. The hon. Member for Glasgow, Pollok talked about betting coups and people wandering around Glasgow claiming that horses were bound to win. I seem to remember, without intruding too much on a private grief, that there was a betting coup in relation to certain events that happened not a huge length of time ago in the Palace of Westminster. Certain hon. Members, who represent the relevant part of Scotland, were thought to have been betting on a certainty. I seem to remember that the hon. Member for Motherwell and Wishaw (Mr. Roy) had to resign a position as a result of accepting that he had bet on an outcome that he was influencing.
Mr. Davidson rose—

John McWilliam: Order. Before we go too far down that road, the Committee should return to the effect of the amendments under consideration. With regard to the comments of the hon. Member for Glasgow, Pollok, I want to point out that when I worked in and around Pollok, turf accountants offices were not to be seen because they were unlawful in those days.

Nick Hawkins: In the light of your ruling, Mr. McWilliam, I shall not pursue the matter. The Minister has helpfully rewritten the clause and we shall accept Government amendment No. 335. We ask him, however, to reconsider whether it may be better to import a concept of reasonableness into the provision later in our proceedings.

Ian Davidson: Given the present company, I wish to say that my hon. Friend the Minister is wonderful, as is our Whip, who has treated us harshly, yet fairly.

John McWilliam: Order. I hope that the hon. Gentleman is not referring to anyone who is sitting beyond the Bar in the Room. That would be out of order.

Ian Davidson: Is there someone beyond the Bar? I had not noticed.

Mark Field: I can see someone over here.

Ian Davidson: That is good. ''Mr. Holiday'' has just responded to me.
 Will the Minister clarify the juxtaposition of clause 300(5)(b), under which a fine or penalty or compensation is to be paid by the police authority, with clause 299, under which any money seized or forfeited goes into the Scottish Consolidated Fund? That is a trifle unfair and unbalanced, given that the Scottish Consolidated Fund receives all the gains, yet the penalties fall on the individual police force.

John McWilliam: Order. The hon. Gentleman should raise such matters under the clause stand part debate, not when the Committee is discussing an amendment.

Dominic Grieve: I want to touch on two matters, the first of which is in respect of the comments of the hon.
 Member for Wellingborough (Mr. Stinchcombe). He is right that the amendment should read:
''such that the court or sheriff considers it reasonable''.
 The word ''them'' under the amendment was probably a result of my drafting it late in the evening. I apologise and I am grateful to the hon. Gentleman for picking up the error. 
 I have a query about the Government's amendment. The Minister said that it would usually be the case that, when the cash was detained for more than 48 hours and was not in an interest-bearing account, compensation would be paid. It is right that there is a residual court discretion not to pay it. That is clearly implicit in the word ''may'', not in the word ''must''. The hon. Gentleman is looking a little quizzical, so I shall read out the relevant part. The amendment states: 
''If, for any period after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant.''
 The only inference that can be drawn from that form of words is that the Minister is envisaging circumstances in which the court should have the discretion not to award interest, even though the cash had not been placed in an interest-bearing account and the person was entitled, all along, to that money. I am interested why such a form of words is used. If the Minister wishes, in the ordinary course of events, for the money always to be paid and assessed under proposed subsection (1B), surely the word ''must'' should be used. If he has a cogent reason why the court should have the discretion not to award interest in those circumstances, I should be grateful to hear it. However, he has not touched on such a reason so far. I doubt if one has crossed his mind. I suggest respectfully to him that the amendment would be better drafted if ''must'' replaced ''may''.

Bob Ainsworth: It is possible that the hon. Gentleman has a point. We are discussing rare occurrences. As he is aware, there is a requirement under the Bill that the money be paid into an interest-bearing bank account. There will only be certain circumstances in which that will not happen. Therefore, interest will have accrued and the money will be repaid with that interest.
 The word ''may'' is used if, for whatever reason, the money is not placed in an interest-bearing bank account. I cannot think of such circumstances. I have not discussed situations in which the money is not paid into an interest-bearing bank account, yet it is subsequently returned because it is not forfeit, and interest should not apply. However, such situations might arise, and perhaps we should address that possibility.

Stephen Hesford: Would it not be possible for the court to come to the view that the applicant is at fault? The money might not have found its way into the interest-bearing account because the applicant did not respond or take part at the relevant
 time. In such circumstances, the applicant would be partly culpable.

Bob Ainsworth: Those kinds of thoughts are going around inside my head. The main reason why money might not be paid into such an account is because it is required for evidential purposes, but, subsequently, the person from whom the money was removed might not be found to be blameworthy. I wish to reflect upon the matter, so that I can ensure that I can satisfy the Committee that the word ''may'' is appropriate, and so that, if that word is inappropriate, I can examine whether it ought to be changed.
 There might be circumstances in which the court should not pay the interest. The money might not have been paid into an interest-bearing bank account, and—as my hon. Friend the Member for Wirral, West (Stephen Hesford) has pointed out—that might not be entirely the fault of the constable or the customs officer. The applicant might be at fault—although, at the moment, I cannot think why that might be the case.

Ian Lucas: Clause 295(1), which deals with interest, might be of assistance. That subsection includes the statement that interest ''is to be added'' on forfeiture or release. That might address the concerns that have been raised by Opposition Members.

Bob Ainsworth: I am not sure that my hon. Friend is right about that. Clause 295(1) covers situations in which the money has been paid into the account and the interest has accrued. It provides that when the money is returned, the interest should be paid, along with the original capital amount. We are now discussing situations in which, for whatever reason, the money is not paid into the account within the required 48 hours, and I am not dead sure that that is covered by clause 295(1).
 There might be situations in which the court might want to assert that it was not the fault of the customs officer or the constable that the money was not paid into the account. The court might wish to assert that the person from whom the money was seized was at fault, because they caused a delay in the payment of the money into the interest-bearing bank account, therefore they should not be compensated for the loss of that interest. 
 If such situations might arise, the word ''may'' is appropriate. If such situations will not arise, we ought to consider using the word ''must'', and I give an assurance so to do.

Ian Davidson: I am in favour of discretion for the court in such circumstances. People are not always found to be either innocent or guilty. Under Scottish law, a verdict of not proven is possible, in which case the court might be uncertain about what position to take. Therefore, it would be better to leave the court with some discretion.

Bob Ainsworth: As I have indicated, I wish to reflect upon the matter and to comment on it later.

Dominic Grieve: I agree with the Minister that it is important to examine whether circumstances might arise in which a court, properly exercising its discretion, would decide to deny payment of interest
 because the person from whom the money was seized had committed some kind of misfeasance or misconduct. However, as the argument has developed, I am bound to tell the Minister that I find it difficult to see the exact circumstances in which that could happen. On the face of it, the money would have been taken and the purely administrative act of paying money into the account would not have been properly done. It is difficult to know how the blame could lie on the person concerned.
 One could widen the argument and ask whether the person attracted the investigation on to themselves. However, that is dangerous ground when dealing with a situation in which there is an administrative requirement to carry out a simple action.

Bob Ainsworth: I agree with the hon. Gentleman. The requirement of the money as evidence would be the main reason why it would not be paid into the account. I am thinking of circumstances in which a person was aware of a fact that was not disclosed that required the money to be held as evidence rather than paid into the account. If it became apparent subsequently that the matter could have been cleared up and the money paid into the account, the failure to do that would be the person's fault. However, I agree with the hon. Gentleman, and I cannot think of a situation other than that.

Dominic Grieve: I am much obliged to the Minister and I am grateful for his undertaking to examine the matter further.
 Amendment agreed to. 
 Amendment made: No. 336, in page 173, line 41, leave out '297(5)' and insert '[Victims]'.—[Mr. Bob Ainsworth.] 
 Question proposed, That the clause, as amended, stand part of the Bill.

Ian Davidson: I will not repeat the point that I made because I am sure that the Minister understood it and was preparing a response. I was perhaps unduly and gratuitously constructive earlier, so I will clarify my position that the Minister is too soft and the Whip too hard.
 I was impressed by your perspicacity, Mr. McWilliam, at spotting the growth of my one of my colleagues' facial hair. I had considered making a similar point about the fact that the hon. Member for Henley (Mr. Johnson) has had a haircut. This morning, he entered the Room freshly cut and combed. However, since then he has found a hedge to be dragged through backwards and his hair—such as it is—has regained its usual unruly state.

David Wilshire: There is a bit of jealousy on that side.

Ian Davidson: Yes, indeed.
 Over the Christmas and new year period—this is immediately relevant to our debate—I went to see ''The Lord of the Rings''. I do not know if you have seen the film, Mr. McWilliam, but if you see it, I suggest that you look closely at the hobbits and decide 
 whether they remind you of the hon. Member for Henley. I think that there is a very close similarity. 
 I ask the Minister about the imbalance between where the gains from seizures go and where the penalties for any mistakes come from. The structure runs the risk of inhibiting the police authority from encouraging officers to take action lest they discover that a number of cases go against them, causing considerable expense. In such circumstances, the police would not have the countervailing balance of sums fed elsewhere into the system on which to call automatically. I hope that money that entered the Scottish Consolidated Fund under the Bill would be redirected for such purposes, but there is no guarantee of that. 
 Will the Minister clarify that point? I have spoken about Scotland, but the same point applies to all police forces in England and Wales.

Nick Hawkins: It is a genuine pleasure to be able to agree with one of the hon. Gentleman's points. He waxed lyrical about the facial appearance of two members of the Committee, but while he was away getting bronzed before Christmas—I think that he was fortunate enough to be visiting warmer climes in Africa on parliamentary business—Conservative Members made an almost identical point to the one that he made about police authorities. He may not have appreciated that. We did not bother to table the same amendment for the matching Scottish provision, because we felt that we had already discussed the subject.
 The hon. Gentleman may well agree—I hope that the Minister will respond to the point—that, when compensation is awarded against police authorities, a problem arises that could as easily have an adverse affect on his authority in Scotland as it could on mine in Surrey. When compensation is paid from a police authority budget, whether north or south of the border, the sum is not necessarily made up from central funds. Many of us who are concerned about the inadequate funding of our police authorities are concerned that extra expenditure may be taken from them. 
 When we debated the matching provision for England and Wales, I made the point that it is unfortunate that in all other provisions in the Bill for cases of misfeasance by those in public office, compensation is taken from central funds. The only case in which it comes from a defined budget is when it comes out of police authority funds. That is a problem, and I hope that the Government will think carefully about it. I seem to remember that the matter was one of many that the Minister said he was prepared to think about again—although I am not sure, as he said that about many subjects. Even if he did not, I urge him to do so. 
 We in Surrey have had grave problems with unexpected costs that have fallen on police authorities. The biggest bone of contention was the exceptional costs that fell on Surrey police when Senator Pinochet was under house arrest. That caused a great deal of local media interest and led to many meetings between Surrey MPs and Ministers, 
 including the right hon. Member for Norwich, South (Mr. Clarke), who was then a Home Office Minister. The Home Secretary promised on television that Surrey police would not lose out and that Surrey council tax payers would not face any additional burden. Despite that public promise, which I heard myself, Surrey police have been left out of pocket. Only £700,000 was reimbursed, although the total cost, as the chief constable has repeatedly made clear, was £1.1 million. 
 That shortfall is germane to our concern about extra, uncompensated costs that fall on police authorities. That is particularly the case as lots of other things will come out of central funds under the Bill. I am glad that the hon. Member for Glasgow, Pollok recognises that inconsistency. I hope that the Minister will take the matter further.

Bob Ainsworth: I have been distracted into trying to fathom how, other than by his unruly hair, the hon. Member for Henley resembles a hobbit. It is certainly not in size.

Boris Johnson: I hesitate to intervene on the Minister. I am at a loss to understand what either hobbits or my hairstyle have to do with the important amendments under discussion. If someone could explain that to me, I should be most grateful.

John McWilliam: I totally agree with the hon. Gentleman: that troubled me, too. While we are on the subject, I have not seen the ''The Lord of the Rings''. My only contact with it was when I worked on an electronic telephone switch called a ''Gandalf'' years ago—although my grandson has plans for me this weekend.

Bob Ainsworth: Nothing at all, is the answer to the hon. Gentleman's admonishment. It was just too tempting an opportunity to get him to speak, as my hon. Friend the Member for Glasgow, Pollok tried and failed to do. I am pleased that my plan worked and that we heard that little outburst.
 I freely accept that my memory is not all that I could wish it, but my recollection of our previous conversation on the subject is not the same as that of the hon. Member for Surrey Heath: it is quite the reverse, although I stand to be corrected. The Opposition have backed away from the position that they held in our earlier debate. When my hon. Friend the Member for Glasgow, Pollok puts it like that, it appears that there is an imbalance, but I hope that he and Opposition Members will reflect on the matter. If we want accountability for the way in which laws are enacted, compensation for cases in which they are not properly applied must be connected to some accountability. It is dangerous to remove that accountability entirely. 
 We should not remove from local police forces the burden of compensation for their actions. I am surprised if that is Opposition policy. Provisions are in place for compensation in exceptional circumstances—that is exceptional expenditure incurred by a police authority. It would be detrimental for central funds to accept the 
 consequences of compensation claims made against police forces. Equally, I am not sure that hon. Members have thought through the idea of telling Customs and Excise or police authorities, ''What you get, you keep.'' Our courts would not be properly used if we went down that route. 
 The Bill provides that money is paid into the Consolidated Fund, but that up to half is subsequently transferred into the asset recovery fund. That money is paid to develop further the policies and structures that we have discussed and to compensate the communities that suffer most from the activities of organised crime, drug trafficking and so forth. That is an appropriate way to achieve accountability for any misuse of powers, and to ensure that the powers that we give to the police are not misused through any direct gain from the pursuit of the proceeds of crime by a particular force.

David Wilshire: I am grateful to be able to join in a discussion on the differences of opinion among Labour Members, but I am prompted to tell the Minister of my sympathy for his view on accountability. It makes sense to keep pressure on an individual police authority to conduct its business in such a way as to avoid compensation. However, if he is to pursue that argument, he should apply the same test to Customs and Excise. It is not simply that the hon. Member for Glasgow, Pollock is wrong and that the responsibility should stay with the police. The Minister should go on to say, ''Perhaps we should review the situation when a Customs and Excise officer is involved.'' From my limited knowledge of Customs and Excise arrangements, I readily accept that officers regard themselves as separate from the Inland Revenue and the general Exchequer—if that is the right phrase. Under most circumstances, if one said that their money is all part of the global tax take, they would answer that they are officers of the Crown and that they are collecting separate money. They may wish to sustain the argument that by penalising the Customs and Excise funds centrally, pressure is exerted on them because they are accountable for the money that they collect and pay out.

Bob Ainsworth: I am not aware that Customs and Excise gets to keep all the moneys that it seizes under its powers. Subsection (4) states:
''If the cash was seized by a customs officer, the compensation is to be paid by the Commissioners of Customs and Excise.''
 We are already doing what the hon. Gentleman asks.

David Wilshire: I accept the Minister's answer up to a point, but there is a distinction involved in the case of a global fund held by Customs and Excise, which is a national matter and a huge sum. With that huge sum and a vast array of Customs officers, it is difficult to pinpoint accountability. In contrast, with the exception of the two big police services—the Metropolitan police and, probably, Strathclyde police, although I am not familiar with that force—there is a clear line of accountability to the funds of a smallish police authority and individual officers and members of the authority.
 If the Minister wants to sustain his argument about genuine accountability in individual police forces, he 
 should examine the process of accounting in Customs and Excise. The commissioners of Customs and Excise will always regard themselves as collectors of customs duties, not merely collectors of tax money for the Treasury. At the end of the process, the commissioners hand over to the Treasury what they, in my experience of Customs officers, argue is their money. However, I do not believe that that would necessarily meet the Minister's requirement for genuine accountability. 
 Perhaps the Minister should speak to the commissioners of Customs and Excise and examine how they budget and divide up their accounting arrangements and whether it might be possible to table an amendment to provide that an individual collector in Customs and Excise is the person responsible for the area in which the incident happens and that all individual collectors of Customs and Excise must have individual budgets. Perhaps the way to ensure accountability is to provide that the money should come from the budget of the collector responsible. When that collector's performance and budget are reviewed at the end of the year, he will have much more pressure on him to explain what went wrong and, therefore, not to do it again. 
 Perhaps the Minister could accept the suggestion made by the hon. Member for Glasgow, Pollok to take the pressure off the police service. That might be one way of dealing with the matter. Another might be to find some means of putting additional pressure on Customs and Excise. My conclusion is that the one unacceptable proposal is to leave the status quo.

Ian Davidson: I want to respond to some of the Minister's points. I was present to hear the argument that the hon. Member for Surrey Heath, among others, advanced previously, and I believe that this matter is substantially different.
 I accept the Minister's point about accountability, but he seems to be in danger of introducing one-sided accountability. The police service is to be held accountable and will have to pay for any mistakes but will receive no reward, benefit or recognition of any gains or achievements. The accountability is purely negative. 
 When a police force—they are generally under financial pressure—considers its overall strategy, the mechanism that the Minister proposes is likely to drive it into an ultra-cautious stance that presents virtually no possibility of penalty. I have always taken the view that the police should be much more active than they would be in taking such a safe, secure, cautious position. 
 I accept, and I believe that it is in the spirit of what the Government intend we should accept, that mistakes will be honestly made. I do not want people to proceed only on the basis of being absolutely certain in every case. I want them to proceed on the basis of having reasonable grounds for believing that they can achieve a result, although not willy-nilly. However, such a position involves an acceptance that mistakes will be made that might involve compensation. 
 The danger is that authorities will, in determining their strategy, have to take into account the fact that the more active they are, the more expense is likely to be involved. In Scotland, for example, lots of drugs come up the motorway from England. When they cross the border, they enter the area of Dumfries and Galloway police. Subsequently, they enter the area of Strathclyde police. It is entirely possible that Dumfries and Galloway, an extremely small force with a very small budget, will be inhibited from trying to arrest couriers in their area lest they become liable for any penalties. They may pass information on to Strathclyde for them to catch people a bit further up the road, so that Strathclyde police will risk the penalty, on the basis that they have a bigger budget, and if the operation goes wrong they can afford to pay the price. 
 This is a serious point. I want the Bill to work, and I do not want the police to be given carte blanche, but if we are to have accountability, it must be balanced. If there is going to be blame and pain, there has to be some prospect of gain and balance, too. If the Minister cannot give me the assurances that I want today, I hope that he will undertake to consider how our shared objectives can be achieved.

Bob Ainsworth: My hon. Friend is being a little unfair by saying that there will be no gain and it will all be potential pain. He has exaggerated the circumstances by suggesting that the police authority has no interest in ensuring the recovery of assets, 50 per cent. of which will wind up in the asset recovery fund. Police authorities throughout the country will have input into how that money will be used. It will benefit the communities about which they are most worried.
 The police will benefit because, for the purposes of tackling crime, the proceeds of crime will be confiscated. The asset recovery fund may contain a credible amount. The police can make suggestions about how it is spent to make their jobs easier and the lives of those whom they protect better. It is not true that there will be no gain. There will be no direct gain. We are not saying to an individual police authority or to Customs and Excise, ''What you get, you keep,'' or that they can have 50 per cent. of what they get. If we did that, we would be providing a fairly extravagant and potentially perverse incentive in respect of how the Bill can be used, and that would worry me greatly. 
 We must consider the deterrent effect. We are discussing compensating someone—in the majority of cases—at the rate of interest because the constable or Customs officer has failed to pay the money that he confiscated into an interest-bearing bank account within 48 hours. That would apply too in the most exceptional circumstances in which we have taken money from someone believing it to be the proceeds of crime or intended for use in crime, but that turns out to be the property of a legitimate business man on the way to make a deal from which he would profit. We would, in effect, compensate him for the loss of that profit. 
 Exceptional circumstances will apply on rare occasions. In most cases, there will be only relatively small amounts when the interest has not been paid. 
 There will not be many circumstances in which it is not possible for the authorities to pay in the money within 48 hours. We are discussing cash and claimable items, and in the majority of circumstances the authorities should be able to pay the money into the interest-bearing bank account and there will be no compensation to be paid. My hon. Friend has exaggerated the downside—the deterrent effect—of the provision. We are giving powers to both Customs and police officers that they will welcome. They will be willing to use them and such powers will subsequently benefit the communities that those officers protect. 
 Question put and agreed to. 
 Clause 300, as amended, ordered to stand part of the Bill.

Clause 301 - The minimum amount

Dominic Grieve: I beg to move amendment No. 462, in page 174, line 3, leave out from 'is' to end of line 5 and insert '£10,000'.
 This is a probing amendment to give the Minister an opportunity to put on the record what he has already hinted at, which is where the minimum monetary point at which money will be recovered will kick in. I understand that it will be £10,000, and that could be expressed in the Bill. An argument against that is that, with the passage of time, there may be occasions when, without wishing to return to primary legislation, it ought to be possible to alter such a figure to reflect the changing value of money. I should be grateful if he would explain the position and say what the level will be when the Bill is enacted.

Bob Ainsworth: I am grateful for that clarification. I thought that we were going to go down a well-trodden path, which would bore the Committee. The clause will require the Secretary of State to set a minimum amount to apply in the relevant clauses of chapter 3. The order must be made by the Secretary of State after consultation with Scottish Ministers and will be subject to the negative resolution procedure. It is better to establish a minimum amount in that way, rather than in the way proposed in the amendment. If the minimum amount were to need adjustment, to which the hon. Gentleman referred, that could be done by secondary rather than primary legislation. We have not made a final decision on the level of the threshold, but we anticipate that it will be at a level of £10,000, which of course is the threshold for cash under the borders scheme that currently applies in the provisions of the Drug Trafficking Act 1994. With that caveat, I hope that the hon. Gentleman is satisfied, and that he will withdraw the amendment.

Dominic Grieve: That goes a long way towards satisfying me. I confess that I would be happier if the Minister were able to tell us, before the Bill leaves the House of Commons, exactly what the amount will be. A figure of £10,000 makes a lot of sense because it is in the existing legislation. It also makes a lot of sense because, at current values, it is the kind of minimum level that we should be concerned about, and it reflects
 the level of money that people are likely to have on their person or in their houses.
 Picking up on what the hon. Member for Glasgow, Pollok said at various stages—I am sorry that he is not here at the moment—if one has £25,000 in cash in a box in the house, it looks a bit odd. Certainly, anecdotal evidence suggests that some people carry several thousand pounds on them. If one were to reach the point at which the police were feeling the need to seize sums of £4,000 or £5,000 found on an individual at any one time, they might find that they had a pretty big task on their hands. That was the reason for my concern. If the Minister could address that before the Bill leaves the Committee, it would be helpful.

Bob Ainsworth: I do not disagree with a word that the hon. Gentleman has said. I shall try to firm up what I have said as soon as possible.

Dominic Grieve: I am happy with that. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

David Wilshire: I have learned from experience that it is incredibly difficult to raise a question about the future of sterling without its appearing to be either out of order or in some way part of a hidden agenda. I genuinely seek information from the Minister, as I have a curious turn of mind. Whether one should dispense with sterling and introduce a different currency is not what I want to talk about.
 Given legislation of this sort, in which reference is made to sterling, would the Government of the day have to come back and amend all legislation with such references if the currency of this country were to change? Alternatively, does the Bill state somewhere that, for sterling, one should read whatever currency is in use in the United Kingdom at the time. That must apply to hundreds if not thousands of statutes in the United Kingdom. Has anyone given thought to how we would handle that problem?

Bob Ainsworth: All that I can say to the hon. Gentleman is that the Bill does not contain a clause stating that if the currency is changed certain provisions will not apply. I assume that an all-embracing clause would be included in legislation to change the currency, but I am not capable of answering his question.

David Wilshire: I am grateful for such honesty, which appeals to me. Will the Minister undertake to find out and give us an answer?

Bob Ainsworth: That is not within my ministerial responsibility. As a Member of Parliament, the hon. Gentleman can table questions to Treasury Ministers if he chooses to do so. Perhaps that is how he should pursue his query.

John McWilliam: Order. The hon. Gentleman's question is beyond the title of the Bill, and should be addressed elsewhere.
 Question put and agreed to. 
 Clause 301 ordered to stand part of the Bill..

Clause 302 - Property obtained through unlawful conduct

Bob Ainsworth: I beg to move amendment No. 337, in page 174, line 17, leave out 'Property' and insert
'Recoverable property obtained through unlawful conduct'.

John McWilliam: With this it will be convenient to take Government amendments Nos. 338 and 339.

Bob Ainsworth: These amendments will ensure that the drafting of clauses 302 and 303 is clear with regard to when property is recoverable. They do not represent a change of policy, but they will ensure that the clauses have the intended effect.
 Amendment No. 337 is a drafting amendment. Clause 302 provides that property may be followed when it is disposed of by the person who originally obtained it through unlawful conduct. Where the property may be followed, it will remain recoverable, even though it is held by another person. Where property is disposed of, and one of the exceptions in clause 306 applies, the property ceases to be recoverable: it cannot be followed into the hands of the person who has obtained it. Thus, if property is disposed of to a bona fide purchaser, it cannot be followed into his hands—and it cannot be followed on a subsequent disposal. Amendment No. 337 makes that explicit, by establishing that the provisions to follow property apply to property obtained through unlawful conduct only while it is recoverable property. 
 Amendments Nos. 338 and 339 apply to clause 303. Subsection (1) of that clause provides that property that represents the original property obtained through unlawful conduct may also be recoverable property. It will be recoverable provided that the original property is, or has been, recoverable property. Thus, even if the original property has ceased to be recoverable—for example, because one of the exceptions in clause 306 now applies to it, or because it no longer exists—the property that represents it will remain recoverable. However, as I have mentioned, the original property may cease to be recoverable because one of the exceptions in clause 306 applies to it. 
 Subsection (2), as it is currently drafted, has the effect that, where other property is obtained in place of the original property, the other property represents the original property, regardless of whether the original property has ceased to be recoverable. I bet that that is not clear to Committee members, as we concentrated on cash forfeiture before switching to definitions, and we have now returned to civil recovery. 
 The situation to which I have referred with regard to subsection (2) should not arise under subsection (3), as it is implicit in that subsection that, if there is a disposal on which property cannot be followed, the property ceases to be recoverable. However, we think that it would be helpful if that was explicitly stated. That is why amendment No. 339 amends subsection (3) to make it clear that it applies only to recoverable property.

Dominic Grieve: I am reminded that, when the Committee debated civil recovery, there was some
 discussion of what constituted property that had been obtained through unlawful conduct, but I will not waste the Committee's time by rehearsing that at length.
 The Government amendments are interesting, and I welcome them, as it is clear that they are intended to clarify: indeed, the Minister will be aware that I have tabled an amendment to clause 306 that addresses the same issue. 
 Subsection (1) states: 
''Property obtained through unlawful conduct is recoverable property.''
 Equally, it is not the case that recoverable property is property obtained through unlawful conduct. The reverse does not apply, because there is a series of exceptions. The law—as stated under the Bill—is that the property is deemed to have been obtained through unlawful conduct, but that it cannot be recovered. 
 It may be an exercise in linguistics or semantics, but as the Minister is aware, I expressed at an earlier stage my worry about at what point it could be said that property ceased to be property obtained through unlawful conduct. Unless that point is identified, it could be for ever and a day before the limitation period expires. I was also worried about the possible opprobrium that might be attached to a person. People could say of him, ''Well, it may be true that the property could not be recovered from you, but it was still obtained through unlawful conduct.'' 
 It is noteworthy that the Minister must have had a sliver of feeling in that direction, because the Government amendments attempt to clarify that issue. I raise that matter now because when we discuss clause 306 I shall tempt him a little further. I shall ask him to exclude the bona fide purchaser for value without notice from being deemed to possess property obtained through unlawful conduct. Save for what I have just said, I welcome the Government amendments.

David Wilshire: I not sure whether it is the appropriate moment to raise the matter, but the Minister made a point today that is absolutely correct and accurate. He bet that some people did not understand what he had read out. He was spot on. I followed him for the first couple of sentences, though, and there is a matter under clause 306 that worries me. I understand that he said that he had tabled the amendments to clarify that people who had acquired property in good faith would not find themselves in an unholy mess. Will he reassure me that, if a person has money of his own that is nothing to do with crime, and he purchases something in all good faith without any sort of collusion, he will not be caught up in seizure, forfeiture, confiscation, or whatever the correct word is? I think that that is what he was trying to reassure me about. If he was not, I am deeply concerned. I do not believe that buyer beware should apply to that type of situation. Is that what the wonderful legal jargon, carefully prepared by one of the Minister's civil servants, was telling me?

Bob Ainsworth: I do not know whether I can satisfy the hon. Gentleman without returning to the explanation that we used in an earlier part of the
 Bill. Unless we say that property that represents recoverable property is itself recoverable, we will not succeed, because people will be very effective at hiding the proceeds of crime. Therefore, there is a need for mobility, so that such property can be chased through. At some point, for various reasons, property ceases to be recoverable. The example that has been flagged up is when a property has been acquired by a bona fide purchaser for value—and why not?
 However, the chain then goes off in another direction and I suggested that it was like the branches of a tree. Selling property to a bona fide purchaser for value would provide a return, which would then represent the original property that was the proceeds of crime. The tracing should be allowed to continue. The innocent bona fide purchaser for value will be free of any ability to claim back that which has fallen into his hands, but the eventual profits of that original criminality should be traced. 
 The hon. Gentleman is right. He is worried about a situation when a legitimate person who acquires property in a legitimate way for full value, not knowing it to be the proceeds of crime. I can assure him that such property is not recoverable. We will discuss the matter when we consider the amendments to clause 306. Heaven only knows how we remove the opprobrium from such situations. As the hon. Gentleman and I know, people still suggest that the Elgin marbles and the Koh-i-noor diamond and other items were obtained by semi-legitimate or illegitimate means. Debate will continue about that and about the circumstances in which something is chased because it is the proceeds of crime.

David Wilshire: I am grateful to the Minister for his reassurance on the question that I asked. However, I have a mind that looks for a booby trap and his reply prompts a further question. If I were a collector who, in all good faith, purchased an antique that was acquired by a person involved in a crime, I understand that the Minister says, ''That's that,'' and that the antique ceases to be recoverable because I have acquired it, but if the person who sold the antique to me returned and said, ''I desperately want it back; I'll pay you 20 per cent. more than you gave me for it,'' would that person, who sold the proceeds of crime, acquire back property that cannot be gathered in?

Bob Ainsworth: No, the person would not, because the branches of the tree have gone around the blockage. The only way in which the hon. Gentleman would be protected would be if he bought the antique for full value without knowledge that it was the proceeds of crime. If the person returned and offered to buy the antique, it could be shown that he bought it back with money that was gained from his original criminality. The money that was paid for the antique in the first place could be recoverable and if money were paid to get the antique back, the antique would again become recoverable property.

David Wilshire: What about the 20 per cent. extra that was paid in good faith?

Bob Ainsworth: That depends where it came from.
 Amendment agreed to. 
 Clause 302, as amended, ordered to stand part of the Bill.

Clause 303 - Tracing property, etc.

Amendments made: No. 338, in page 174, line 27, leave out 
'the original property or of'
 and insert 
'recoverable property, whether the original property or'.
 No. 339, in page 174, line 31, after 'of', insert 'recoverable'.—[Mr. Bob Ainsworth.] 
 Clause 303, as amended, ordered to stand part of the Bill.

Clause 304 - Mixing property

Dominic Grieve: I beg to move amendment No. 470, in page 175, line 1, leave out subsection (3).
 To my mind, the clause is extremely simple. Subsection (1) states: 
''Subsection (2) applies if a person's recoverable property is mixed with other property (whether his property or another's).''
 Subsection (2) states: 
''The portion of the mixed property which is attributable to the recoverable property represents the property obtained through unlawful conduct.''
 That is crystal clear. Why do we have subsection (3)? It does not purport to be definitive, because it states: 
''Recoverable property is mixed with other property if (for example)''.
 I am puzzled as to why primary legislation should contain a subsection that gives limited examples of what the other subsections may relate to. The Minister may persuade me of a good reason for that, but otherwise I query whether the subsection is required.

Bob Ainsworth: I anticipated the hon. Gentleman's argument. Subsection (3) is intended to be helpful to the courts. The amendment would not achieve anything.

Nick Hawkins: A shorter Bill.

Bob Ainsworth: It might save some paper, but most Bills have already been printed, so the paper has already been wasted. However, new versions will be printed.
 Subsection (3) sets out four examples of when recoverable property may be mixed with other, non-recoverable property. The intention behind the examples is to assist the courts by clarifying how the provision will work in certain circumstances. The examples are not intended to be an exhaustive list, as the hon. Member for Beaconsfield said. They give an indication of the breadth of the situation in which the provisions are to be applied. That was our intention, and if he considers the examples that are given under the Bill, he will see that they show the breadth of the 
 provision. We thought that the subsection would be helpful and there is no other reason for it than that.

Nick Hawkins: In light of the definitive case of Pepper v. Hart, the Minister can help the court by giving examples as he would usually do when in Committee. Such matters do not have to be set out in the Bill because his words, as recorded by Hansard, become part of the guidance to the courts.

Bob Ainsworth: The hon. Gentleman is absolutely right. Nothing will be lost under the Bill by removing subsection (3). However, nothing will be gained. It was drafted for a good reason. It shows the breadth of the provision in a potentially complicated area. I suggest that hon. Gentlemen, despite their misgivings about the subsection, accept that it should remain and that such matters may be helpful to people without their having to trawl through Hansard reports to find out what was said in Committee.

Dominic Grieve: If the clause had been drafted under the part of the Bill dealing with confiscation, whereby matters would have taken place in the Crown court in front of Crown court judges, it might have been helpful. On the basis that such matters will be dealt with under civil recovery procedure in the High Court, surely the points made under subsection (3) might be matters of which the judiciary had some knowledge. However, I do not want to make a big issue out of the amendment. I understand the Minister's point. I see that he has been handed a note.

Bob Ainsworth: I want to make the hon. Gentleman aware that such measures apply to the whole of part 5. We are talking about not only the High Court but the magistrates court.

Dominic Grieve: Then perhaps the Minister makes a good point. I accept that it could be helpful to put such details in front of the noses of a bench of magistrates who have to determine a particular issue. I do not suppose that they will be familiar with the principles of mixing property. Perhaps I am a pedant, but I have always believed that we should try to keep legislation simple.

Ian Lucas: I am interested that the hon. Gentleman is arguing for excluding information from the Bill, when throughout our considerations he has often advanced the opposite argument.

Dominic Grieve: If there were a definitive list of the categories, I would welcome it. However, the fact that we are being treated to examples is an odd way in which to present a Bill. I was about to withdraw the amendment, but I shall not do so immediately, because my hon. Friend the Member for Spelthorne (Mr. Wilshire) may wish to say something.

David Wilshire: My hon. Friend said that magistrates may find the measure helpful. I accept that, but this is not the only clause that will go before a magistrate. Why is it thought necessary here, when in great tracts of the Bill, which could well end up in a magistrates court, we are not treated to that way of proceeding? If the poor magistrates need help on the issue, we need to be told why they do not need help with other passages of the Bill, as otherwise the provision is not necessary.

Bob Ainsworth: The hon. Gentleman is right. There is no end to what we could do. I am trying not to agree with him as he sits there in his Pooh bear tie. Our intention was to clarify the position and spell out examples in order to show the breadth of the provision. It would not be helpful for me to say more. I do not believe that the examples in the Bill do any harm. I therefore ask the hon. Member for Beaconsfield not to press the amendment to a vote.

Dominic Grieve: In those circumstances, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 304 ordered to stand part of the Bill. 
 Clause 305 ordered to stand part of the Bill.

Clause 306 - General exceptions

Dominic Grieve: I beg to move amendment No. 471, in page 175, line 19, at end insert
'or property obtained through unlawful conduct'.
 This is the amendment to which I alluded earlier. It addresses the question of what happens to property that passes into the hands of a bona fide purchaser for value without notice. In a helpful intervention, the Minister made the point that when that happens, 
''property obtained through unlawful conduct''
 is still recoverable, because, as he put it, the roots go round the tree trunk. The recoverable property would then be the value paid by the bona fide purchaser to the person who was not a bona fide holder of the chattel or property concerned. That could still be recovered, so long as the limitation period had not been reached. 
 I find it difficult to understand why the amendment should not be accepted. It says that once property has passed to the bona fide purchaser for value without notice, it ceases to be property obtained through unlawful conduct. I accept that the amendment has no practical significance for recoverability. As the Minister knows from my interventions in previous sittings, which I do not want to go over ad nauseam, I feel anxiety about the opprobrium that attaches to those who are said to hold 
''property obtained through unlawful conduct''.
 That term is created by statute and by us. It is not a general term used in the world at large; it is our term, which we in Parliament have decided to put together. If the Bill works, that term may well be used in the press and people may comment on it. 
 I can easily foresee a situation in which someone gets the wrong end of the stick, perhaps deliberately, and is able to say that although the court made the decision that a person's property was not recoverable, he was still in possession of property obtained through unlawful conduct. If my amendment were accepted, that problem could no longer arise, because when the bona fide purchaser for value without notice obtained property in good faith, it would cease to be property obtained through unlawful conduct—and cease to be recoverable; that is the common ground between the Minister and me. 
 As the Minister rightly says, it is not as if the money or benefit has completely disappeared. As long as the limitation period has not expired, the roots around the item can be traced to those who have not been bona fide purchasers for value without notice. Property may still be recovered from them, and in certain circumstances, proper criticism may attach to them for the manner in which they have dealt with or handled that property. 
 I hope that the Minister will consider accepting the amendment. It seems innocuous, and in no way to detract from his desire to send a powerful signal about the demands of society—''society'' seems popular at the moment, although we might say the Government or the Administration instead—to be able to recover and trace property obtained through unlawful conduct. It would send a clear signal that that does not apply to the bona fide purchaser for value without notice, who is in every sense an innocent party. If he were not, no doubt in the course of studying the Bill we would have found circumstances in which recovery against him could be made. We have not, and the Minister has made the position crystal clear. Therefore, his property cannot and should not be defined as property obtained through unlawful conduct.

Bob Ainsworth: Society does seem to be in fashion again—through no action of the Government, but because the hon. Member for Surrey Heath, whose sidekick I have accused the hon. Gentleman of being, is going around the television studios saying that it does exist after all, in spite of the comments made by an earlier leader of the Conservative party. It is good to see the rediscovery of the existence of society on behalf of Her Majesty's Opposition, and a retraction from that appalling position.

Dominic Grieve: I hesitate to say that I believe that a previous politician's words may have been misinterpreted. However, regardless of whether they were, I assure the Minister that I have always believed in the existence of society.

Bob Ainsworth: I believe that the hon. Gentleman always has—but that does not necessarily apply to all Conservative Members, either now or in the past. I wonder how deep the transformation in the Conservative party is, and how much support the hon. Member for Surrey Heath has for his change of tack.
 The amendment would establish not only that property in the hands of a bona fide purchaser would not be recoverable, but that it could not be regarded as having been obtained through unlawful conduct. As we said previously, civil recovery is a proprietary remedy that relates to the characterisation of property, rather than the person holding it. If property is or represents property obtained through unlawful conduct, it is recoverable. 
 The Bill provides a limited number of defences and exceptions to that rule, to ensure that the enforcement authority cannot recover property when it would not be right to do so. They include, in clause 306(1), the 
 defence that one is a bona fide purchaser for value. Subsection (1) protects the bona fide purchaser for value by stating that when a person has obtained recoverable property in good faith, for full value and without notice, it cannot be followed into that person's hands, and therefore ceases to be recoverable. That cannot, however, change the fact that the property was at some stage obtained through unlawful conduct. No provision in the Bill can change the facts. Property retains its tainted history even if it is now indisputably the lawful property of the person who holds it. 
 Although under the Bill property in the hands of a bona fide purchaser for value remains property gained through unlawful conduct because of its history, there is no implication that the bona fide purchaser is blameworthy or acquired the property in dubious circumstances. That is the point of the bona fide purchaser provision. 
 As I said, we cannot wipe out the property's history through provisions in the Bill. At some point in its history it was gained unlawfully. That applies to all sorts of property, including parts of the Crown jewels. Nothing in the Bill will prevent people from exposing the history of particular items of property. The hon. Member for Beaconsfield is reaching for something that is unattainable. I accept that he is trying to do something in good faith, but I do not believe that it is possible. We must ensure that we provide full protection for the individual, while allowing the pursuit of recoverable property through its various transformations—and, we hope, recovering it at the end of the day. I cannot accept the amendment, and I ask the hon. Member for Beaconsfield to withdraw it.

David Wilshire: I am disappointed by that reply. I support my hon. Friend wholeheartedly because there is a valid point to be made about a person who acquires something in all innocence that he wishes to keep. There is no reason why a stigma should be attached to that. The Minister said that if property is tainted, it is tainted. Will he reflect that there are circumstances in which the property that is obtained is not necessarily of itself tainted?
 There is a clear distinction in my mind—although the lawyers may tell me that it is not present in law—between property that is obtained by theft and property that is obtained by purchase. If any person—I do not know why we should consider only drug dealers and their cash—was convicted of a crime concerning which the measures are to be used, and had been involved in the theft of much valuable property, it might be necessary to go down this route. The Minister may tell me that that would not be appropriate. However, if it was appropriate, and items obtained by theft were subsequently sold, it is reasonable to argue that although the property was acquired in good faith, it was originally stolen.

Bob Ainsworth: That is a fact.

David Wilshire: The Minister is correct. I can accept that such property would be tainted, and I accept his definition.
 However, I may buy something from a drug dealer without knowing that he is a drug dealer. All the provisions would apply and, as the Minister said, I would be totally innocent—and therefore entitled to keep what I purchased with my hard-earned money. A drug dealer may buy an antique because he believes that to be the best way to get rid of the cash that he has slopping around. I do not accept that if I subsequently bought that antique from him, it would be tainted. The property would be perfectly innocent, because it was not acquired in the process of any crime. A crime would have been committed from which money was acquired and used to acquire through the proper channels a totally innocent and genuine antique, which was subsequently sold to me. I hope that the Minister will reflect and come to the conclusion that that item is not tainted.

Nick Hawkins: Would it bolster my hon. Friend's argument to use a specific example? In yesterday's Evening Standard, I noticed an example of a person who could sell property in the precise circumstances that my hon. Friend mentioned. The media celebrity and television personality Johnny Vaughan disclosed in an interview that at the age of 23, he served a substantial custodial sentence for supplying cocaine. He also mentioned the huge amounts that he has earned for working on ''The Big Breakfast'' and television comedy shows. That gentleman would be selling lucrative items. Why should a bona fide purchaser for value without notice of those items who was not aware of the now celebrated person's conviction for supplying drugs be tainted?

John McWilliam: Order. This debate is deteriorating rapidly into one that goes wider than the amendment allows. The amendment is extremely narrow. The hon. Member for Beaconsfield made the intention behind it clear, and hon. Members are trying to widen the debate to areas that it does not cover.
Mr. Wilshire rose—

John McWilliam: I have not finished. Furthermore, an intervention is meant to be just that. The previous intervention was a bit long.

David Wilshire: I am grateful for your guidance, Mr. McWilliam.
 My hon. Friend raised a fair example. Having made the point that it is possible to hold such property that is not tainted, I shall not go further down that route. 
 However, I wholly support my hon. Friend's amendment. The wording may not be to the Minister's liking, but he cannot dismiss an amendment by saying, ''Look, the property is tainted, and there is nothing we can do to say that it isn't.'' The best way that the Minister can describe my example of something that is acquired after the crime rather than in the process of the crime is as property that was previously obtained using funds that were obtained unlawfully. The property itself was not obtained unlawfully by the person who has the money. If the Minister cannot accept my hon. Friend's wording, will he consider an alternative wording, whereby it is not the property that is tainted, but the money that was originally used to acquire it?

John McWilliam: Order. The hon. Gentleman has gone miles wide of the clause and the amendment, which are related not to money but to property.

David Wilshire: I understand that, Mr. McWilliam, which is why I sat down just before you stood up, as I had finished speaking.

Mark Field: We have had a long debate on the amendment, and I endorse entirely the points made by my hon. Friends the Members for Spelthorne and for Beaconsfield. As far as the Minister is concerned, the property is tainted, and there is a clear, strong argument that it is tainted for ever. However, we have a real concern that a bona fide purchaser for value without notice is also likely to be tainted by attachment to property that has been obtained through unlawful conduct, and the individual's good name will inevitably be affected, however innocent he is. I wonder whether there is a form of words that could resolve that.

Bob Ainsworth: What can we do, other than name the individual as a bona fide purchaser for value? Surely that makes the situation as clear as possible: he was a bona fide purchaser for value without knowledge, and was totally and utterly innocent—and the property would no longer be recoverable. However, the fact that he is described in that way does not change the history of the property. I do not know how we can do that. We could try all kinds of contorted phrases—the hon. Member for Spelthorne tried one—but if we had to have wording such as ''obtained by funds that were obtained by funds that were obtained by funds that were originally the proceeds of crime'', that will be nonsense.

Mark Field: That may well be nonsense, and it may not be the ideal way of drafting amendments to such clauses. None the less, I hope that the Minister will reflect further on how to remove the taint that would otherwise be transferred to a bona fide purchaser for value without notice.

Dominic Grieve: I listened carefully to the Minister, and I am mindful of the points that he made. However, concepts are being misunderstood.
 The Minister alluded to the fact that that which is unlawfully obtained remains, in history, unlawfully obtained. I can see the force of that if property is originally stolen property. At the beginning there was a victim—an individual who was deprived of it. One thinks of Earl Warenne—not the Earl Warren involved in the inquiry into President Kennedy's assassination but a 12th-century Earl Warenne—and the Act of quo warranto, whereby the King sent round justices to inquire how people held their land. Earl Warenne became a bit shirty, opened an old cupboard, and said, ''By this rusty sword!'' Clearly, there had been a victim of the original land depredation, at the time of the conquest. I have no doubt that hosts of properties held in this country were acquired by such unlawful acts. 
 The interesting point about the Bill, which we have discussed previously, is that it is not necessarily about property of which a person has originally been unlawfully deprived. Those individuals have remedies at law that are independent of this legislation, which 
 provides a complete statutory definition of a new thing called property obtained through unlawful conduct. There does not necessarily need to be a victim. It so happens that the origin of the money was through activities outside the law—that is the best definition that I can provide. 
 Analogies to the Crown jewels have little force, because we are discussing a statutory definition. Therefore, adding the phrase 
''or property obtained through unlawful conduct.''
 does not cause the chaos that the Minister envisages. When property is in the hands of a person who has paid good money for it and is innocent of any knowledge of its origins, the property obtained through unlawful conduct has the value of the money that was paid by the innocent person to the other person. 
 Although I regret taking up the Committee's time, an issue of principle is involved and I wish to press the matter to a Division. I dare say that it will not surface again in the passage of this legislation, unless it arises in another place, but I would not be doing justice to the issue if I did not ask the Committee to vote on it. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 5, Noes 13.

Question accordingly negatived.

Dominic Grieve: I beg to move amendment No. 472, in page 176, line 36, leave out subsection (10).
 If I recollect correctly, this is a simple matter. Clause 306 deals with exceptions. Each exception is explained and it says at the end of most of the subsections that the property ''ceases to be recoverable.'' However, subsection (10) is not an exception but a definition. My query is exactly the same as that in respect of clause 304 (3). Why is subsection (10) necessary? Does it fulfil any useful purpose? The Minister will probably give exactly the same explanation as he gave for clause 304 (3).

Bob Ainsworth: I will not, because this is not as clear as that.
 Subsection (10) provides for how the provisions of clause 306(1) and (2) apply in cases where clause 303 is engaged—that is, where a person has entered into a transaction whereby he disposes of the original recoverable property and obtains other property in its place—in other words, where there is representative property. 
 Subsection (10) makes it clear that any representative property obtained in place of the recoverable property will still be recoverable. The amendment would remove that provision. Removing subsection (10) would not necessarily mean that the representative property would not be recoverable, but the position would be less clear than it is at the moment. 
 Clause 306 sets limitations on the enforcement authority's ability to follow and trace property, by setting out certain exceptions to civil recovery and cash forfeiture. Subsection (10) ensures that those exceptions cannot result in the avoidance of civil recovery or cash forfeiture proceedings. 
 An example of that might be helpful. Under clause 302, if someone is given a car in return for a contract killing and he subsequently sells the car, the enforcement authority may follow the car into the hands of the purchaser and recover it from him. Under clause 303, the money received in return for the car comes to represent the car, and is also recoverable property. 
 Clause 306(1) provides that property is not recoverable where it is obtained by a bona fide purchaser. If the purchaser pays full value for the car, and is unaware that it is the proceeds of unlawful conduct, the enforcement authority is not entitled to recover the car from him, or from anyone who may subsequently acquire it. The purpose of that is to defend an innocent purchaser who obtains property that would otherwise be a potential target for civil recovery. 
 However, the exception will apply only to the car; it will not apply to the proceeds of the sale. Subsection (10) makes it clear that the proceeds of the sale of the car, which themselves represent property obtained through unlawful conduct, will remain recoverable. 
 I accept that it is possible to argue that subsection (10) is not essential to achieve that result; it could be said that there is nothing in subsections (1) or (2) that suggests that representative property could become immune from prosecution in the circumstances that have been set out. However, as the provisions on recoverable property—including those on tracing property—are not straightforward, we think that it is preferable to retain subsection (10), to avoid any possible confusion. 
 The hon. Member for Beaconsfield was right after all: at heart, my argument is the same as the previous one. However, as it is also more complicated than that one, I wished to address it in greater detail. For the reasons that I have given, I ask the hon. Gentleman to withdraw his amendment.

Dominic Grieve: The Minister has persuaded me. I take his point on board, and beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 306 ordered to stand part of the Bill.

Clause 307 - Granting interests

Dominic Grieve: I beg to move amendment No. 473, in page 176, line 45, leave out subsection (2).
 Here we go again, Mr. McWilliam. Clause 307(1) states: 
''If a person grants an interest in his recoverable property, the question whether the interest is also recoverable is to be determined in the same manner as it is on any other disposal of recoverable property.''
 That is a clear statement. However, the following subsection merely offers a further example of it, and, for the same reasons that I have previously raised, I ask the Minister whether it is necessary.

Bob Ainsworth: Clause 307 makes provision about the granting of interests in property. Subsection (2) sets out how interests in recoverable property are to be treated, both where the property is the original property obtained through unlawful conduct, and where it is representative property. The amendment would delete the subsection, thus removing the explanation of how interests in the original and representative property are to be treated.
 Under clause 307, where a person grants an interest in recoverable property, the granting of the interest is to be regarded as a disposal of the property. The question whether the interest is recoverable is then to be determined in line with the provisions regarding disposal of recoverable property. Let us suppose, for example, that a person who has obtained a freehold house through the proceeds of unlawful conduct grants a tenancy of it. At the time the house was obtained, the tenancy did not exist. The tenancy cannot therefore be described as having been obtained through unlawful conduct, either by the landlord or the tenant, but it is intended to be as recoverable as the property itself. 
 Subsection (2)(a) sets out how the provision is to work when the property in which an interest is granted is the original property. It is to be treated as though it had been obtained through the same conduct. Subsection (2)(b) sets out how it will work when the property is representative property; the interest is to be treated as representative property. Subsection (2) therefore provides a valuable indication of how interests in recoverable property should be treated. That will assist the court by showing how the provisions under clause 307(1) are to be applied. For reasons that, as I am sure that the hon. Member for Beaconsfield anticipates, are similar to those that I gave previously, I invite him to withdraw the amendment.

Dominic Grieve: I am grateful to the Minister for his explanation. I can see that the provision may be helpful in some way, and if he wants it in the Bill, so be it. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 307 ordered to stand part of the Bill.

Clause 308 - Insolvency

Bob Ainsworth: I beg to move amendment No. 463, in page 177, line 23, after 'under', insert
'section 2 of the 1985 Act,'.

John McWilliam: With this it will be convenient to take Government amendments Nos. 464 to 469.

Bob Ainsworth: The amendments are purely technical. They are designed to add references to the separate Scottish legislation on personal insolvency under clause 308.
 Amendment agreed to. 
 Amendments made: No. 464, in page 177, line 24, after 'of', insert 'interim trustee or'. 
 No. 465, in age 177, line 27, after 'or', insert 
'in relation to Scotland, of a person whose estate has been sequestrated,'.
 No. 466, in page 177, line 30, at end insert 
'or 
 (f) in relation to Scotland, it is property comprised in the estate of a person who has granted a trust deed within the meaning of the 1985 Act.'.
 No. 467, in page 177, line 41, at end insert— 
'( ) the 1985 Act means the Bankruptcy (Scotland) Act 1985 (c.66),'.
 No. 468, in page 177, line 46, at end insert 
'or, in relation to Scotland, any property comprised in an estate to which the 1985 Act applies,'.
 No. 469, in page 178, line 2, after 'of', insert 'the 1985 Act,'—[Mr. Bob Ainsworth.] 
 Question proposed, That the clause, as amended, stand part of the Bill.

David Wilshire: I shall not detain the Committee; I just want to be told that I am wrong. [Hon. Members: ''You are wrong.''] Such psychic powers could be used to tell us who will win the 3.30 at Kempton Park tomorrow.

John McWilliam: Order. The hon. Gentleman has been here long enough to know that hostages to fortune in Committee are routinely shot.

David Wilshire: So long as it is only the hostages to fortune that are shot, Mr. McWilliam. I shall soon come to a query about wills and intestacy, so perhaps that turn of phrase will make me feel comfortable.
 Am I to understand that if someone who receives the proceeds of crime manages to organise himself in such a way that he becomes bankrupt, proceedings cannot be taken against him unless permission is granted? If that is so, in what circumstances would permission would be granted? I sense a loophole. Having committed the crimes, people might find that to organise a bankruptcy petition could be a useful way of avoiding proceedings.

Bob Ainsworth: I hope and believe that there is not a loophole in the provision. It is for the insolvency court to decide whether action goes ahead. A petition does not necessarily preclude recovery going ahead. When insolvency and recovery are taking place at the same time, the insolvency court will be given the discretion
 to decide whether to go ahead. The loophole that the hon. Gentleman fears will not be created.

David Wilshire: As I understand it, the insolvency court could decide to allow the insolvency proceedings to go ahead. If that is so, surely there is a loophole, because if you can disguise the way in which you brought about the insolvency, you could achieve a decision that would allow insolvency to go ahead. You could have organised your creditors in such a way that they would gain possession of the proceeds of crime, and the Bill would stop the pursuit of them.

John McWilliam: Order. My bank manager may be a bit fed up with me after my Christmas spending spree, but I am not thinking of filing a bankruptcy petition. When the hon. Gentleman uses the word ''you'', he is referring to me.

Bob Ainsworth: As I said, the insolvency courts will hear representations and balance the rights of the creditors against the rights of the director. However, the director will argue his case and say that the proceedings should go ahead. The insolvency court will have to hear the other representations. It is only right that the interests of creditors should be taken into account. I hope that the hon. Gentleman will not argue that they should not. The fact that the court has the discretion to decide protects the rights of creditors. It is for the court to decide on the balance between their rights and the director's need to recover the proceeds of crime.
 Clause 308, as amended, ordered to stand part of the Bill.

Clause 309 - Obtaining and disposing of property

Question proposed, That the clause stand part of the Bill.

David Wilshire: This is the matter about which I gave notice. Subsection (3) states:
''Where a person's property passes to another under a will or intestacy or by operation of law, it is to be treated as disposed of by him to the other.''
 Will the Minister reassure me that the disposal would not mean that the items concerned could not be pursued? If a matter were not pursuable because it passed through a will or intestacy, the temptation to murder would be rather high.

Bob Ainsworth: There is always a temptation to murder, particularly at this time of day. I assure the hon. Gentleman that a will or intestacy does not preclude the property from being pursued and recovered.
 Clause 309 ordered to stand part of the Bill.

Clause 310 - General interpretation

Amendment made: No. 340, in page 178, line 25, at end insert 'or (7)'.—[Mr. Bob Ainsworth.]

Bob Ainsworth: I beg to move amendment No. 341, in page 179, line 14, leave out
'by virtue of section 267'
 and insert 
'under section 267 (including one made by virtue of section 276)'.
 The amendment makes a technical change to the definition of ''recovery order'' given in clause 310 in order to achieve greater clarity in the drafting. ''Recovery order'' is currently defined as 
''an order made by virtue of section 267''.
 That is intended to include the recovery order made in 
''terms agreed by the parties''
 under clause 276. The amendment clarifies that point. 
 Amendment agreed to. 
 Amendment made: No. 342, in page 179, line 43, at end add— 
'( ) Proceedings against any person for an offence are concluded when— 
 (a) the person is convicted or acquitted, 
 (b) the prosecution is discontinued or, in Scotland, the trial diet is deserted simpliciter, or 
 (c) the jury is discharged without a finding'—[Mr. Bob. Ainsworth.]
 Clause 310, as amended, ordered to stand part of the Bill.

New Clause 8 - Consent orders: pensions

'(1) This section applies where recoverable property to which proceedings under this Chapter relate includes rights under a pension scheme. 
 (2) A recovery order made by virtue of section 276— 
 (a) may not provide for the rights to be vested in the trustee for civil recovery, but 
 (b) may include provision imposing the following requirement, if the trustees or managers of the scheme are parties to the agreement by virtue of which the order is made. 
 (3) The requirement is that the trustees or managers of the pension scheme— 
 (a) make a payment in accordance with the agreement, and 
 (b) give effect to any other provision made by virtue of this section in respect of the scheme. 
 (4) The trustees or managers of the pension scheme have power to enter into any agreement to which a recovery order made by virtue of section 276 may give effect. 
 (5) The following provisions apply in respect of a recovery order made by virtue of section 276, so far as it includes the requirement mentioned in subsection (3). 
 (6) The order overrides the provisions of the pension scheme to the extent that they conflict with the requirement. 
 (7) The order may provide for the recovery by the trustees or managers of the scheme (whether by deduction from any amount which they are required to pay in pursuance of the agreement or otherwise) of costs incurred by them in— 
 (a) complying with the order, or 
 (b) providing information, before the order was made, to the enforcement authority, interim receiver or interim administrator. 
 (8) Sections 273(6) and 274 (read with section 275) apply as if the requirement were included in an order made by virtue of section 273(2). 
 (9) Section 275(3) to (6) has effect for the purposes of this section.'.—[Mr. Bob Ainsworth.]
 Brought up, read the First and Second time, and added to the Bill.

New Clause 9 - Victims

'(1) A person who claims that any cash detained under section 294, or any part of it, belongs to him may apply to a magistrates' court or (in Scotland) the sheriff for the cash or part to be released to him. 
 (2) The application may be made in the course of proceedings under section 294 or 297 or at any other time. 
 (3) If it appears to the court or sheriff concerned that— 
 (a) the applicant was deprived of the cash or part, or of property which it represents, by unlawful conduct, 
 (b) the property he was deprived of was not, immediately before he was deprived of it, recoverable property, and 
 (c) the cash or part belongs to him, 
 the court or sheriff may order the cash or part to be released to the applicant.'.—[Mr. Bob Ainsworth.]
 Brought up, read the First and Second time, and added to the Bill.

Dominic Grieve: On a point of order, Mr. McWilliam. I hope that the staff who are serving the Committee do not consider themselves the ''victims'' for having to attend on so many occasions.

John McWilliam: For clarification, I should explain that we heard the word ''victims'' because the new clause was being read formally for the first time, so the Clerk read out its title.
 Further consideration adjourned.—[Mrs. McGuire.] 
 Adjourned accordingly at sixteen minutes to Five o'clock till Tuesday 15 January at half-past Ten o'clock.